updated 03:40 pm EST, Fri January 30, 2009

Sony on PS3 Price Drop

Sony Computer Entertainment Europe chief David Reeves in Eurogamer interview published today has defended the absence of PlayStation 3 price cuts during the holidays as a necessary measure to protect Sony's business. The executive acknowledges that price cuts will likely be needed to spur sales but that the goal has been to turn the PlayStation group profitable and that economic conditions will likely force Sony to be defensive with pricing in the future.

Pricing may change on the PS3, which costs $399 in the US, but is only likely to happen if the cost of building the system itself allows. Sony has significantly reduced the price of making the expensive Blu-ray system since its 2006 launch but is still losing money on systems alone and so can't afford to widen the price gap.

"It is possible that as the cost [of manufacturing] comes down, we will be able to [drop the price]," Reeves says. "But we're protecting ourselves with a very hard shell to get through the next one or two years of an economic situation... I'm not going to say we're going to do anything short term or anything long term on the price. At the moment, we have a value-added strategy."

The PS3's base price has largely remained unchanged since a drop in 2007. In 2008, the company kept prices the same while upgrading the hard drives and has routinely sold fewer consoles in key areas than either Microsoft and Nintendo, whose least expensive systems were priced at $200 and $250 respectively by the end of the year.

Reeves additionally notes that there isn't any immediate talk of a PS4 in the works. "I have never even heard it mentioned," he says. "I think people are concentrating so much on what's happening now that they're not even thinking about it."

I have seen the breakdown of the cost to build a PS3 and they aren't joking. It is well over $300.00 to build. The blu-ray player in the PS3 is killing Sony. They hoped it would be a trojan horse like the PS2 was with DVD, but things didn't work out and now they have an overpriced machine (nice, but it cannot compete in price with MS and Nintendo).

I really don't see Sony back a PS4. I guess the "curse" of no company ever successfully producing three consecutive game consoles is on the money.